Proton Mtr Pwr Regulatory News (PPS)

23 Dec 2008 15:10



Proton Power Systems plc

("Proton Power" or "the Company")

Equity subscription

Proton Power (AIM: PPS), the designer, developer and producer of fuel cells and fuel cell electric hybrid systems, announces that, further to the equity subscription announced on 25 September 2008, it has agreed to raise up to a further £1.5 million from Roundstone Properties Ltd ("Roundstone").

On 25 September 2008, it was announced that Roundstone subscribed for 10,000,000 new ordinary shares at 10 pence each (the "Initial Subscription Shares") and that it intended to subscribe for a further 10,000,000 new ordinary shares at the same price by the end of January 2009 (the "Second Subscription Shares").

Based on the funding requirements of the business and as a consequence of the continuing difficulties in the financial markets, the Board of Proton has agreed with Roundstone to extend its investment by a further £1.5m. It was agreed that, in conjunction with the issue of the Second Subscription Shares at 10p each to be issued on or around 9 January 2009, Proton would issue to Roundstone warrants over 30,000,000 ordinary shares exercisable at 5p each. 

The Board believes that in the circumstances this structure serves the needs of the Company well, as it guarantees the £1m from the issue of the Second Subscription Shares, while also potentially raising a further £1.5m, representing an overall average price of 6.25p per share, which is in line with the current market price of the ordinary shares of the Company.

The warrants will be split into three equal tranches of 10,000,000 shares each, with the first being exercisable between February and April 2009 inclusive, and the second and third between February and December 2009 inclusive.

The third tranche of warrant instruments will be conditional on the Directors obtaining the requisite authorities from shareholders to issue an additional 10,000,000 ordinary shares.

Related Party Transaction

Roundstone is a company connected to Dr. Faiz Nahab, a non-executive director of the Company, and is also a substantial shareholder (as defined in the AIM Rules) of the Company. The issue of warrants to Roundstone is therefore classified as a transaction with a related party for the purposes of the AIM Rules. In accordance, therefore, with the AIM Rules, the directors of the Company, with the exclusion of Dr. Faiz Nahab, having consulted with the Company's nominated adviser, Arbuthnot, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned. 

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Notes to Editors 

Proton Power Systems plc is a developer and manufacturer of fuel cells and fuel cell hybrid systems for motive and stationary power supply. Its sales-driven strategy focuses on identifying applications with the greatest market needs and supplying large volumes of cost-competitive systems to fulfil those needs. Proton is targeting a global opportunity, accessing a broad range of markets through partnerships with leading OEMs such as Skoda Electric and Karmann.

Motive applications include forklifts, city buses, municipal utility vehicles and ferries; 'back-to-base' markets which can readily utilise the modularity and scalability of the Company's hydrogen fuel cell systems, and which do not depend on the existence of a ubiquitous hydrogen infrastructure, thereby facilitating swift commercialisation.

Stationary applications focus on the Uninterruptible Power Supply sector, where there is a large demand for mission-critical, grid-independent secure power supply in places such as telecommunications stations, data centres, hospitals, and power substations. Further market potential lies in industrial and chemical processing plants, where the otherwise wasted hydrogen by-product can be harnessed for producing local power. 

Through its wholly owned subsidiary, Proton Motor Fuel Cell GmbH ("Proton Motor"), the Group has developed and produced a fuel cell module that can be integrated with energy storage media to create a hybrid fuel cell system. A proprietary, intelligent energy management software balances the power output across the fuel cell storage unit(s) to maximise efficiency and improve power delivery. The system thus boasts lower fuel consumption and more consistent levels of power delivery than conventional diesel/combustion engine or fuel cell-only systems, in addition to producing zero harmful emissions. 

Proton Power Systems plc was admitted to trading on AIM on 31 October 2006 and is incorporated in the UK. Proton Motor has more than 15 years of experience in the fuel cell market and is located in Puchheim, near Munich, Germany, where its manufacturing facility is based.